Minister of Finance Toomas Tõniste (Pro Patria) on Wednesday said that the Estonian state does not have to play babysitter to people who irresponsibly use money freed up from their second pension pillars.
The Pro Patria Party on Tuesday introduced a plan to reform the country's second pension pillar which would not involve abolishing it, but rather granting people the right to transfer money accrued in their pension funds to their own investment accounts and manage it themselves.
Tõniste told ERR that he believed that if people are given more freedom to grow and use their pension assets, they will ultimately have more assets and savings upon retiring than they would if the present system were to remain in place.
Future pensions likely to be small
According to Tõniste, state pensions will more likely be small in the future, which is why it would be reasonable for people to save for their retirement.
"People also need to be told honestly that state pensions will rather be small in the future, and that is why they must in any case set aside savings or invest in their homes or businesses for their retirement," said the minister.
Pro Patria's proposal was subject to some degree of criticism as well. President of the Riigikogu Eiki Nestor (SDE), for example, said that the proposed plan entailed the risk that people would spend their pension money before even reaching retirement. Pro Patria chairman Helir-Valdor Seeder, however, said that even if people were to start using their pension savings to pay off loans, for example, he saw nothing wrong with that.
Tõniste, however, believes that people will act responsibly with their money. "The state does not have to start being everyone's babysitter due to some people's irresponsibility," he commented.
Editor: Aili Vahtla